2018年-IMF国际货币组织全球_Hungary_2018_Article_IV_Consultation_62页_4mb

2018 Article IV Consultation with Hungary Summary

Core Content

The 2018 Article IV Consultation with Hungary, conducted by the IMF Executive Board, assessed the country's economic performance and policy outlook. The consultation highlighted strong growth, reduced external debt, and a procyclical fiscal policy. The report also emphasized the need for structural reforms and a rebalancing of the macroeconomic policy mix to ensure long-term sustainability and convergence.

Main Economic Developments

• Growth: Hungary achieved strong GDP growth of 4% in 2018, similar to 2017, driven by increased domestic demand, accelerated EU fund absorption, and strong disposable income.
• External Debt: External debt declined significantly over the past few years, from 117.8% of GDP in 2013 to 76.2% in 2018.
• Public Debt: Public debt also decreased, from 77.1% of GDP in 2013 to 71.3% in 2018, though at a slower pace.
• Current Account Surplus: The external current account surplus moderated from its 2016 peak, declining to 3.1% of GDP in 2018.
• Inflation: Headline inflation rose to 3.1% in 2018, mainly due to energy price increases, while core inflation remained stable at around 2.5%. The inflation target of 3% is expected to be slightly exceeded in the near term.
• Unemployment: Unemployment continued its downward trend, reaching 3.7% in May 2018, while labor shortages intensified.
• Exchange Rate: The HUF depreciated against the euro, with an average rate of 329 HUF per euro by end-2018.

Fiscal Policy

• Fiscal Deficit: The 2017 general government fiscal deficit narrowed to 2% of GDP, below the budgeted 2.4%, due to strong GDP growth and reduced interest payments.
• Structural Primary Balance: Despite the narrowing overall deficit, the structural primary balance deteriorated by about 1.2% of potential GDP.
• 2018 Fiscal Deficit: The 2018 fiscal deficit is projected at 2.4% of GDP, in line with the budget target.
• Fiscal Overperformance: The fiscal overperformance, combined with strong GDP growth, contributed to a reduction in public debt by 2.4 percentage points to 73.6% of GDP.
• Recommendations: The IMF urged a growth-friendly fiscal consolidation starting in the second half of 2018 to reduce fiscal vulnerabilities and create space for future policy responses. This includes phasing out sectoral taxes, broadening the tax base, and improving tax administration. It also recommended reforming public administration to reduce the wage bill and enhance public services.

Monetary Policy and Financial Sector

• Monetary Stance: The MNB further relaxed its monetary stance in 2017 and early 2018 using unconventional tools. The policy rate and overnight overdraft rate remained at 0.9%.
• Interest Rates: The overnight deposit rate was reduced from -5 bps to -15 bps in September 2017, and the cap on the 3-month deposit facility was lowered.
• Monetary Policy Adjustment: Once inflation approaches the upper half of the 3±1% tolerance band, the MNB should gradually scale back monetary stimulus, unwinding unconventional measures first.
• Housing Market: The MNB introduced a mortgage bond purchase program and encouraged longer-term lending, resulting in over 80% of new lending being at fixed rates. The MNB plans to let the Market-Based Lending Scheme expire by end-2018.
• Banking Sector: The banking system remains profitable, liquid, and well-capitalized. The average Tier I capital ratio was 14.4%, and the CAR was 16.4% in 2017.

Structural Reforms

• Productivity and Competitiveness: Structural reforms are critical to improving productivity and competitiveness. The IMF welcomed the establishment of the Competitiveness Council and the implementation of its recommendations.
• Priority Areas: Key priorities include reducing red tape, enhancing policy predictability, and improving vocational training.
• Investor Environment: Simplifying the regulatory environment and reducing red tape would help level the playing field for all investors, including SMEs and FDI.
• Public Services: Reforming public administration is needed to reduce the wage bill and improve the quality and provision of public services.
• Social Protection: Eliminating generalized subsidies while protecting the poor through targeted measures would enhance efficiency and save resources.

Outlook and Risks

• Growth Outlook: Growth is expected to remain strong in 2018 but will start to decelerate in 2019 as EU fund absorption tapers off and capacity constraints tighten.
• Inflation Outlook: Inflation is projected to slightly exceed the 3% target in the near term due to tight labor markets, energy prices, and HUF depreciation.
• Current Account: The current account surplus is expected to moderate further in 2019 due to strong imports and foreign investor earnings.
• Risks: Risks are tilted to the downside due to softening European economic indicators, emerging market volatility, and trade tensions. Tightening global financing conditions and U.S. monetary policy normalization could increase financing costs. Negative developments in the EU may affect Hungary through reduced exports and foreign bank subsidiaries.
• Upside Risks: Potential upside risks include higher-than-estimated economic slack and stronger growth in Hungary's trading partners, which could lead to faster and more sustained growth.

Policy Recommendations

• Fiscal Rebalancing: A well-sequenced fiscal consolidation is needed to reduce vulnerabilities and create fiscal space for future downturns.
• Monetary Policy Adjustment: Gradual monetary tightening should begin once inflation approaches the upper half of the target band.
• Structural Reforms: Accelerating structural reforms to improve productivity, competitiveness, and the business environment is essential.
• Investor-Friendly Measures: Reducing red tape and simplifying the regulatory environment would help attract more investment and improve the export base.
• Education and Training: Improving education and vocational training is crucial to address skills mismatches and support long-term growth.

Key Indicators

Conclusion

The IMF concluded that Hungary's external position is broadly in line with medium-term fundamentals and desirable policies. However, it emphasized the need for structural reforms to improve productivity and competitiveness, and for a rebalancing of the macroeconomic policy mix to ensure sustainable growth and reduce fiscal and external vulnerabilities.